Letters by a modern St. Ferdinand III about cults

Plenty of cults exist - every cult has its 'religious dogma', its idols, its 'prophets', its 'science', its 'proof' and its intolerant liturgy of demands. Cults everywhere: Islam, the State, the cult of Gay and Queer, Marxism, Darwin and Evolution, 'Science', Globaloneywarming, Changing Climate, Abortion....a nice variety for the human-hater, amoral, anti-rationalist to choose from. It is so much fun mocking them isn't it ?

Monday, December 28, 2009

US Health Care is not a market.

Try market reforms first before socializing what should not be socialized.

by StFerdIII

In Canada government health care spending is about $2,120 USD per person while in the United States government spending is about $2,724 per capita. In other words US governments spend more than Canadian – it is a goverment controlled public good. It is a hoary ugly myth that the US health system is a market. Only 55 % of US health spend is private and that portion is shrinking. In Canada it is 30% and growing. Yet a key difference never muted by socialists, Obamed-cult members; or unions who desire the radical socialization of what remains of the US health market is that death rates in Canada for cancer – the greatest killer in a modern society – are 25 % above US levels. This death rate is telling you something.

Back in the days of hippies, pipe's and war protests, the 1970 levels of health spend between Canada and the US were equal. In 1970 the Canadian spend on health as a percentage of GDP was 7.1 %. In the US it was 7.6%. Since then there has been an explosion in spending in both countries as ageing, demands for technology and attempts to 'cure' cancer and other diseases have resulted in 11% of GDP being spent in Canada on health, and close to 19% in the US.

The discrepancy between the two countries is attributable mostly to three factors; 1) Greater technology development and access in the US; 2) Higher per capita US spend on private insurance plans including drug benefits and 3) Spiraling law suits in the US against medical clinics and doctors and the resultant increase in patient premium costs. None of the factors which have driven up US medical costs are market based. In fact they are government created.

The US has no real market in health care. There is no true policy competition with every state acceding to the insurance lobby, making 'core' policies a legal requirement and limiting policy offerings. This drives up costs to consumers and fattens the profits of the insurance firms. There is also no portability between jobs or across state lines. This is dysfunctional. To bring down costs you need to have price competition open across state boundaries.

For example a 30 year old healthy male in Chicago can only buy a policy which includes pregnancy coverage. He might be excused for not wanting this and deciding that his money is best spent elsewhere. He might also decide that since he will change jobs in the near future and he can't take his insurance policy with him, it makes little sense to have comprehensive health coverage even though he can well afford it. Hence the hue and cry for the 'un-insured' [a simpleton populist claim]. Under US law all citizens have a right to access hospital care and get taken care of. Illegals, the poor and the old without insurance policies will be serviced even without payment. This puts a huge burden on the system. But it is a manifestation of government interference not a feckless 'market'.

Some 90% of Americans belong in privately insured plans with some form of managed care. In this model insurance companies following government rules and regulations, try to tightly control patients' health care to reduce costs, by for example, demanding a second opinion before expensive treatments, or by denying coverage for treatments not considered worth their cost or deemed frivolous or not covered directly by the policy. There is nothing wrong with this. Insurance firms may also deny treatment if the patient lied about a pre-existing condition. This is a contractual issue and one which is contentious and which could be solved if there existed a market for people with existing conditions.

The scope for insurance fraud – from both sides of supply and the consumer - is therefore quite large, all thanks to government interference. In a truly functioning market there would be policies, premiums and different price points to fit all needs and requirements. If pre-existing conditions were a 'market' you can bet that an enterprising firm, able to manage its cost structure properly, would provide policy coverage. The profits would be too tempting to ignore. De-regulated eye-care is an example. In the 1970s eye care was liberated from government control. Tens of thousands of new jobs have been created, access points now flourish and we have seen a radical reduction in price for all varieties, styles and power of eye care, lenses and glasses. The same would be true for health care de-regulation.

The current US health care system is not a market – it is a government distorted nightmare. Consider this:

-$150 billion per annum fraud exists in the socialized programs of US Medicare and Medicaid.

-Lifestyle choices of smoking, drinking and non-exercise are increasingly unpunished as the costs for Medicaid and Medicare explode. This means that people can abuse their minds and bodies and expect others to pay for it. In the private insurance market this is reflected in the escalation of premiums for all consumers – not just the ones who engage in self-abuse. Another example of government distorted quackery.

-Unlimited emergency room access for illegals in the US [what part about 'illegal' don't Leftards understand ?] which costs at least $40 billion per year in hospital costs.

-US administrative costs are a remarkable 31% of total costs [akin to your typical large bloated corporation]. In Canada it is almost half that level – 17%. Tort suits, government demanded paper work and unlimited levels of bureaucratic entanglement ensue an administrative disaster.

-Governments price cap drugs to seniors further distorting real prices and ensuring future health care deficits of $70 billion per annum [the drugs are subsidized and that subsidy has to be paid by someone].

US health care does need reform. But not socialization which the Obamed-cult and its media abettors term 'reform'. It is a deform. Everything which ails the US health system is due to government. So the obvious answer is yes – more government ! Medicaid and Medicare are bankrupt. Yet the Obamed's want to extend this fraudulent disaster to the entire health market and claim that costs will come down. Costs can't come down until you have a functioning market based on prices.

But what about the poor the socialists would wail ? For the 5 to 8 % of Americans who are poor it would be cheaper and more intelligent to literally walk over to the poor person's house and hand them a cheque for health care coverage. That would cost roughly $42 billion per year, the least distortive and most efficient solution. Under a real market system that would likely be unnecessary but it certainly is more efficacious than spending an extra $1 Trillion per annum on Obamed socialized nonsense.

It is clear that socialized medicine has many demerits including higher death rates, rationing, no technology, no access, fewer doctors and too few nurses. If you want to socialize health care, you might as well do it for food, shoes, water, and hair cuts. After all why should a price competitive market work in food or shoes – if it can't or won't in health care ?